Galaxy Digital (GLXY) shares extended their recent decline, falling below the $20 support level to $19.73 — a 45% drop from the stock's June high — after the company reported second-quarter financial results that missed analyst expectations amid a prolonged downturn in cryptocurrency markets. The Michael Novogratz-founded financial services firm, which began trading on the Nasdaq in early 2025 after years on the Toronto Stock Exchange, has seen its valuation closely tied to sentiment in both crypto and broader digital infrastructure markets.

Second-Quarter Results Miss Expectations

Galaxy Digital's revenue declined to $8.7 billion in the second quarter, down 15% from $10.2 billion in the first quarter and well below the $12 billion analysts had forecast. The company's net loss widened to more than $85 million despite ongoing cost-reduction measures.

The digital assets segment generated $11 million in adjusted EBITDA, while the treasury and corporate line item rose to $78 million. The data center segment, which the company has been expanding, produced over $11 million in adjusted EBITDA for the quarter.

Strategic Pivot Toward AI Data Centers

The earnings report comes as Galaxy Digital and several Bitcoin mining firms — including Core Scientific, Hut 8, and Iris Energy — have been diversifying into the data center industry, capitalizing on surging demand driven by the artificial intelligence sector. This industry-wide shift reflects a broader effort by crypto-linked companies to offset volatile digital asset revenues with longer-tenor infrastructure contracts.

Galaxy is investing heavily in this area through its partnership with CoreWeave, an Nvidia-backed cloud infrastructure provider. The company recently acquired three new sites in Texas for AI data center development, bringing its target capacity to 5.7 GW. Under a 15-year lease agreement, Galaxy has begun delivering computing power to CoreWeave.

In the most recent quarter, the data center segment's adjusted EBITDA rose to $20 million. The company targets quarterly data revenue of $80 million with a 90% EBITDA margin. According to Yahoo Finance data, analysts project Galaxy's total revenue to reach $56 billion this year and $72 billion next year.

Building out the necessary infrastructure will require significant capital expenditure, meaning the company may need to raise funds through a combination of debt and equity.

Digital Asset Holdings

There are emerging signs that the crypto market downturn may be easing. Bitcoin recovered from a low of $57,000 to trade above $64,000, while other tokens including Ethereum and Cardano have also gained ground in recent months.

Galaxy Digital is among the largest corporate holders of cryptocurrency. The company holds 6,894 Bitcoin valued at over $441 million, along with $58 million in Solana and $76 million in other digital tokens.

Technical Outlook

On the daily chart, GLXY declined from its June high near $36.10 toward $19.40, breaking below the 61.8% Fibonacci retracement level. The stock also approached the Strong Pivot Reversal level on the Murrey Math Lines indicator.

A continued breakdown could expose support near $17.50, with a broader bearish target near the Ultimate Support level around $12.50 — approximately 34% below the price used in the analysis. However, this target remains conditional, as Murrey Math levels do not guarantee further declines.

A recovery above $20 would ease immediate selling pressure. To invalidate the broader bearish structure, Galaxy stock would need to reclaim the Major Support and Resistance pivot near $25.

The company's weak crypto segment results may continue to weigh on the share price. While the CoreWeave lease and Helios expansion offer a separate growth trajectory, the data center strategy requires substantial funding and time to reach projected scale.